On Blu-Ray I'm curious why people think it won't have it. I can't see any other alternative apart from going fully digital. My reasoning is:
1 - MS are committed to entertainment hub. This means, IMHO, that the next Xbox would still need to play physical entertainment media - which today means DVD and BR. Nintendo with Wii (and by the looks of it Wii U) used a proprietary format but this means the device cannot play DVDs, etc and is a closed environment - not good for a media hub at all. I doubt MS would want to cut themselves off from being able to play physical format films and BR is now a big enough segment they would be foolish to ignore it any longer IMHO.
2 - With increased power will, for AAA games, come higher resolution textures, game assets and content. In short - big AAA games on the next generation of Xbox will almost certainly be bigger than they are now. This means more storage space. If MS stick with DVD again they will be looking at a far higher percentage (probably) of multiple disk games. They need more space but, to point 1) above, I don't think they will take the Nintendo route of going proprietary on the disk format and losing ability to use DVD, BR, etc. playback - the obvious logical choice is BR disk format.
3 - MS need to grow outside US, UK, etc. That means markets that are less able to support a fully digital model, particularly for big games that could easily require a 25GB download. Therefore, unless MS want to commit fully to only highly developed internet infrastructure countries, MS will need physical media for at least one more gen. As per 1) and 2) above I believe this media would need to be larger than DVD but not proprietary to allow for full media hub message. To look at it another way - if the next Xbox was fully digital, then MS would be practically handing the rest of the world to Sony/Nintendo. Likely they would see reduction of marketshare from 360 in many territories. Fully digital to me seems like a very risky route for MS for a 2013/2014 timeframe.
4 - BR is going to be around for a while yet and right now the PS3 is arguably a better media center because it can offer exactly the same services as 360 - online/offline media playback, storage, etc. but it also supports the BR format which is becoming increasingly popular for purchase of latest films while 360 requires you to have a separate BR player which negates the idea of the 360 being your sole media hub. This gen it made sense for MS to not support BR and allow Sony to look expensive - next gen I believe MS will want parity on entertainment hub features (if not superiority) and not supporting the current high end format for physical media would negate that IMO.
To me it just seems the logical and competitive choice for MS to have BR. They have no interest in proprietary formats at all so far as I can see (unlike Nintendo) and they have every interest in growing globally, offering next gen gaming experiences and providing a one stop media/entertainment hub for the home. BR is the obvious choice and would not - despite what some think - line Sony's pockets or help Sony in gaming. MS using BR would be no different from Sony putting Windows on their PCs.
As for the used game stuff and smaller controller, that smells like bullshit. MS would surely know they could throw away their current leadership position in one fell swoop if they cut off used game sales/usage and they also know their controller size is preferred by much of their customer base.
I could see them maybe producing and using a slightly smaller controller in some territories where the 360 controller is seen as large, or having the option to buy a smaller controller, but not committing wholesale to a smaller controller.
Try to be reasonable... its easier than you think...
